Entergy Corp., the second-largest operator of nuclear power plants in the U.S., announced on Monday it will cancel its proposed spin-off transaction that would have relocated six of its nuclear units into newly formed companies, Enexus Energy Corp. and EquaGen LLC. This decision occurred in the wake of the New York Public Service Commission’s (NYPSC) decision on Thursday to reject the company’s planned spin-off.
On Thursday, the NYPSC rejected Entergy’s proposal to spin off six nuclear power plants, including three located in New York, based on concerns that the move was "not in the public’s interest," according to World Nuclear News.
Expressing uneasiness about the potential for the legal process to continue for an extended period, Entergy made the decision to withdraw the nuclear spin-off plan and unwind the internal organizations created for Enexus and EquaGen "to eliminate dis-synergies related to the spin-off and redirect its efforts into other strategies as soon as possible in 2010."
Under the proposed spin-off plan, Enexus would have been a standalone owner of six of Entergy’s current 12-reactor fleet, including the Pilgrim, James A. FitzPatrick, Indian Point, Palisades, and Vermont Yankee nuclear power plants. Equagen would have taken operating responsibility for Enexus’ and Entergy’s reactors.
"We are pleased the Board took action to return cash to our owners who have been patient during this protracted period of uncertainty," said J. Wayne Leonard, Entergy’s chairman and CEO, on Monday. "While we do not have an order from the New York State Public Service Commission, we believe there are serious questions with regard to the basis for the Commission’s March 25th decision to reject the spin-off transaction given the dialogue at the Commission’s meetings over the last few months and will preserve all of our legal rights. That being said, we will leave that to the attorneys to figure out. We are moving forward on the business side to create and capture value unrealized today."
Reacting to Entergy’s decision to cancel the spin-off plan, Vermont Public Service Commissioner David O’Brien called Entergy’s move "a logical conclusion" that erases one of the stumbling blocks to granting Entergy’s Vermont Yankee nuclear plant another 20 years of operation after its license expires in 2012, the Burlington Free Press reported on Tuesday.
"A major distraction when it comes to the future of Vermont Yankee is taken off the table," O’Brien said, adding that he hopes legislators will reevaluate the plant’s economic value to the state and reconsider a vote against the plant’s extension.
Sources: Entergy, World Nuclear News, Burlington Free Press